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What is the Procedure for Property Registration in India?

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In this article, we will try to fully understand the procedure of property registration in India. The article will begin by explaining different terms that a reader should know. Afterwards, the law applicable in the property registration process is explained. Then, the whole property registration procedure is explained step by step. We have also included an illustration for you to understand this process better.

  • While registering your property, you will need a complete list of documents required for property registration.
  • The transfer of any immovable property in India with a value of Rs. 100 or more needs to be registered by paying applicable stamp duty and property registration charges.
  • The laws regarding stamp duties are given under Indian Stamp Act, 1899 and the method of application varies from state to state also depending on the type of transfer of rights i.e. sale, mortgage, partition etc.
  • Properties in India can be acquired by way of inheritance, purchase, gift and grant by the government or court.

For more adept legal help or information regarding the whole procedure of property registration in India, connect to us for an expert legal consultation.

It is the dream of every person to own a house. Buying a property is the most substantial investment for a person as they invest a crucial amount of their money into it. And most importantly, registering that property is an integral part of the buying process.

Property registration is a complex procedure, as various legalities and paperwork are involved in it which can confuse you. Therefore, it is very important for you to know about the process followed when it comes to property registration in India.

Flat registration is very important because it provides legal rights over the property and helps in avoiding any dispute over the title of the property. Property registration completes your official ownership over the property. Another benefit of registration is for the government, as the public records help the government in estimating accurately the census, surveys and maintenance.

Also, only registered immovable properties can sanction you loans. And if in case you lose your property documents, you can obtain certified true copies of the document from the registering authorities and establish you bona fide claim to the property. Lastly, if your property is not registered, then such title of property cannot be legally transferred to any transferee.

If your property is not registered, the law neither recognizes you as an owner nor gives you legal right over it. Also, there exists a risk of fraud or misuse of property. A judgement was passed by the Supreme Court in which it was said that for sale of a property, it is compulsory to transfer it by a sale deed which is duly stamped and registered. One important para is given below -

“It is thus clear that a transfer of immovable property by way of sale can only be by a deed of conveyance (sale deed). In the absence of a deed of conveyance (duly stamped and registered as required by law), no right, title or interest in an immovable property can be transferred.”

Before heading to the registration process, there are some things which should be understood.

Table of Contents:

Consult: Top Property Lawyers in India

What law is applicable?

Registration process in India is governed by the Registration Act, 1908. This act is applicable to the whole of India, except the state of Jammu & Kashmir. It deals with the documents that are compulsory to be registered.

One of the things mentioned in it is any immovable property of the value of one hundred rupees (Rs. 100) and upwards needs to be registered. Therefore a land or a house, which is having a value of one hundred or more, can only be transferred by getting it registered. Registration is a state matter and every state has its own registration fees and stamp duty, calculated according to the location.

What is stamp duty?

Stamping of documents is a very important part of the registration process. Stamp duty is a type of tax which is levied on any transaction where there is an involvement of creation or extinguishing of a right or liability. It is paid on the instrument, and not on the transaction. Some examples of transaction where stamp duty is applicable are: conveyance deed, sale deed, partition deed, power of attorney and lease.

The Indian Stamp Act, 1899, and Registration Act, 1908 governs stamp duty. Stamp duty and property registration charges are required to be paid to the state government by the buyer while transferring the ownership of any property. As stated earlier, it is a state tax, so the rates vary from state to state.

Stamp duty depends upon the location of the property, it is seen that urban areas have a high rate and rural areas have less rate. Also, a women buyer gets a tax rebate in the rate payable. This is done for encouraging women’s ownership over the family property.

For most of the states, the stamp duty applicable is 5 – 7% (five to seven percent) of the property value. Previously, on a sale transaction, stamp duty was paid on the purchase amount. But after the changes in the Indian Stamp Act, 1899, now stamp duty is paid on the amount which is higher, it may be the purchase amount or the market value.

Rates of stamp duty in respect of various types of documents

Nature of Document

Rate of stamp duty

Sale

5%

Sale agreement cum GPA

5%

Development Agreement cum GPA

1%

Development/ Construction Agreement

0.5% of Measured Value (MV) of Land and Construction

Partition among family members

1%

Partition among co-owners

1%

Release

3%

Settlement among family members

2%

Settlement to outside family members

3%

Mortgage

4% with possession and 0.5% without possession

Deposit of Title Deeds

0.5% subject to maximum of Rs. 50,000/-

General Power of Attorney

to family member Rs. 1000/-, others 1%

Special Power of Attorney

Rs. 20/-

Will

No stamp required

Lease

1-5 yrs: 0.4%, 6-10 yrs: 1%, 11-20 yrs: 6%, 21 - 30 yrs: 15%, more than 30 yrs: 3% on MV

What is registration charge?

In addition to the stamp duty, the buyer is also required to pay property registration charges for the property registration. The property registration cost is different in different states and its calculation is done according to the percentage of the saleable value of the property.

Property registration charges are calculated on the higher amount among the property’s saleable value in the area and the property’s actual saleable value.

This property registration cost also depends upon the type of land or building. So, if there is an independent house, the property registration cost may be less than the registration charge of an apartment with multiple floors. For most of the states, the property registration charge applicable is 1% (one percent) of the saleable value.

Who can register?

  • PIO (Person of Indian Origin) – an individual (who is not a citizen of Nepal or Pakistan or Bhutan or Iran or Bangladesh or Sri Lanka or Afghanistan or China), who

  1. at the time, held the Indian passport, or

  2. who or either of whose father or grandfather was a citizen of India as per the Constitution of India under the Citizenship Act, 1955.

  • NRI (Non- Resident Indian) – a person who is residing outside India but is a citizen of India.

Related Read: Probate of Will - Meaning, Procedure, and Duration

Persons eligible to present document for registration

  • The person executing or claiming the registration, or

  • A person who is the representative or is assigned to do it on the behalf of someone, or

  • A person who is the agent of such person by submitting the power of attorney.

Ways of acquiring property in India

  • Inheritance (Property received from your ancestors)

  • Will

  • Purchase

  • Grant by the government or court

  • Gift, trust

Time Limit For Presenting Documents required For Property Registration

  • Presentment of Documents required for property registration should be done within four months from the date of their execution.

  • If the sub-registrar registers the document from any person who is not duly authorized to do the same, then the person claiming under such document should present the document again for registration within four months of coming in the knowledge of the previous registration.

  • In case the time limit for presentment of document has expired, you can make an application to the sub-registrar for condonation of the delay, within the next four months, and the sub-registrar may allow you to register the document. For this, a payment of a fine which may not exceed ten times the original registration fee has to be paid.

  • One can present or deposit the will at any time.

Below is the process of registration of property in India and some important things you must keep in mind.

Steps for the registration process

  • Estimating the value of the property – You are required to calculate and estimate the property’s value according to your area for the payment of stamp duty. Value of the property in your area and the actual sale price/ price paid is compared. Of them, whichever is higher, that amount is taken and on that stamp duty is calculated.

  • Calculating Stamp Duty – Every state has a different stamp duty. For the estimation of the stamp duty, you can visit various websites on the internet which provides this estimation of property service for free. Some of them are India Bulls Home Loan, Legal Service India.

  • Preparing stamp papers – You are required to buy judicial stamp papers which is equivalent to the value of stamp duty. Nowadays, stamps can be purchased online. You can go to Stock Holding Corporation of India e-stamping website for it.

  • Preparing sale deed – You are required to prepare the sale deed and get it typed on the stamp papers. It is usually prepared by authorised attorneys on behalf of the buyer. The sale deed may have a subject like lease, sale, power of attorney, mortgage, etc.

Property Registration Process

Top Read: Gift Deed Registration

  • Paying the Stamp duty and Registration Charge – You can now proceed to pay the stamp duty through the collector of stamps after the stamp papers are ready. Property registration charges are required to be paid before the registration of property.

  • Approaching the Sub-registrar for Registration – You now have to take an appointment with the sub-registrar in whose jurisdiction the subject matter is situated, for the registration of the property. When you go to the sub-registrar’s office, you should take two witnesses along with you. All the parties i.e. buyer, purchaser, witnesses have to carry three passport size photos and identification documents each. There is also a requirement that the person registering any property should submit a photograph with the property. Also, along with the original deed, you should carry two copies of it.

  • Submitting necessary documents – Along with the deed, you also need to submit some documents for the completion of the registration such as proof of payment of stamp duty, No Objection Certificate (NOC) if the building is located in the city’s collector’s land, Identity and address proof, Demand Draft or cash for the payment of the stamp duty, passport size photographs of the parties involved in the transaction, etc. A complete list of documents is given afterwards.

  • Verification Process – At this stage, the sub-registrar will see that the person presenting is either executing or claiming party/representatives. If it is verified, then the sub-registrar puts stamp no. 1 on the paper. Afterwards, the sub-registrar verifies that the stamp duty, registration charge, pasting fee or any sort of penalties or miscellaneous property registration charges are paid. If it is also verified, then the sub-registrar puts stamp no. 2. Then identification of witnesses is done by taking names/signatures and other information like address and occupation. After identification is complete, the sub-registrar puts stamp no. 3. After sub-registrar finds that all documents are complete, he orders for the registration of the property. Also, the registering officer will give a receipt to you for late claiming your document.

  • Certificate of Registration – After about 2-7 days, you can collect the duly registered documents from the sub-registrar’s office. The certificate will contain the endorsement ‘Registered’ along with the number and page of the book in which the document has been copied. Also after the registration, the sub-registrar will return the original copy of the deed that was submitted by you and will keep the copies of it with him.

For more queries or confusion regarding the procedure of property registration in India, ask for expert legal advice from us now!

A complete list of documents:

  • One is required to register the documents in duplicate.

  • Three passport size photos of both the parties and the witnesses.

  • Proof of identification of each party and witnesses like PAN, Aadhar Card, Voter’s ID, etc.

  • In case the property is/was under lease from any government authority, then permission of lessor for registration of the document.

  • No Objection Certificate to the effect that the property is not under acquisition.

  • In case of a person representing someone else, the document of power of attorney.

  • If a person is representing a company, the documents like power of attorney/ letter of authority, along with a copy of a resolution of the board of company, authorizing the person to carry out the registration.

  • During registration of immovable property, a document containing the description should also be submitted.

Further Read: Send Legal Notice for Termination of Lease

Other Relevant Information The Parties Need To Have:

  • Before registering a property, ensure that the previous owner has a clear title over that property. Also, ensure that the seller has the power to transfer the property to you. Also, as a buyer, you should make yourself available to the entire history of agreements relating to the property. This is important to make sure that the property is free from all debts.

  • Now the registration process has become computerized, therefore eliminating many of the traditional methods. Documents are scanned and returned immediately now. Also, a photo of the buyer and seller are taken in the office of sub-registrar itself.

  • The sub-registrar can refuse the registration of property on the ground that it doesn’t come under their jurisdiction, so make sure that you are registering a property by applying to the sub-registrar within your local limits.

  • The sub-registrar can also reject the registration on some other ground, in that case, he will write ‘Registration refused’ on the document. With the application by payment of a fee within time, you can get a copy where the sub-registrar provides the reasons for registration.

  • The person can make an appeal to the registrar if the registration is refused on the ground that the person who is transferring the property or the seller has refused its execution.

  • There is a penalty which can be imposed in case of incorrectly endorsing, translating, copying any document with the intention to injure any person. Also, a penalty can be imposed if false statement, false personation, false copy is made. Also, you can be prosecuted for doing these things, therefore make sure everything is genuine.

  • After the registration process is complete, make sure you collect your registration document, except for will, from the sub-registrar office within two years. If not collected within two years, then the document will be destroyed.

An Illustration

For your better understanding, let’s take an example of a person who is transferring his property to another person.

Bob has a registered piece of land in Bhopal, Madhya Pradesh. He is selling that piece of land to another person, Mike. The market value of that land is Rs. 48,00, 000 /-. But Bob is selling that property to Mike for a consideration of 50,00,000/-. So stamp duty will be charged on the higher amount i.e. 5,00,000/-. , which will be approximately 4,00,000/-. Bob and Mike will now purchase stamp papers and type the sale deed on them as well as pay the registration charges. Next, both the parties and 2 witnesses along with their document, passport size photo and identification proof will go to the sub-registrar of their jurisdiction. Sub-Registrar will verify the documents, and then the registration will get completed.

So, registering a property is a very complex process with the involvement of many documents and compliances. The government has started online property registration where one can pay stamp duty as well as download many registration forms.

Still it is a tough task to carefully complete each and every formality involved in the whole procedure. There are a list of property registration documents required online that you might need for the online process.

Do not miss out on any tiny information or compliance. We recommend you to get in touch with a lawyer who is well-versed with the registration process and knows the ground realities of it. Consulting a lawyer will the registration process hassle-free and smooth.

This is where MyAdvo comes to the rescue with its expertise lawyers. It enables you to find a lawyer online all over India. Now you can book a consultation with an expert lawyer.

 

Written by: Pranjal Jain

National Law University Odisha, Cuttack (4th Year)

Mehak Sharma
Published on 16th May, 2019
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